Limited Liability Partnership (LLP) is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership business, In other words it offers benefits of both worlds by bringing simplicity in management and scope of expansion like that of a company. The compliance requirements are relatively less and only few returns have to be filed. For small LLP the audit Is not required and the compliance is based on the information declared by the partners. A Limited liability Partnership (LLP) is a new form of business introduced in the year 2009, this is a unique form of business in the sense that it has simplicity of a partnership firm and benefits of limited liability as in a limited corporation. Minimum two person can form an LLP with no maximum limit on the number of its partners. The advantage of llp form of business over a private limited is in the fact that there is less compliance requirement in comparison to a private limited company. For instance audit is not required till the time turnover reaches 40 lac or capital reached Rs. 25 lac. This is preferred choice for small businesses with less capital
A Limited liability Partnership (LLP) is a new form of business introduced in the year 2009, this is a unique form of business in the sense that it has simplicity of a partnership firm and benefits of limited liability as in a limited corporation. Setindiabiz offers LLP Registrations from Rs. 7,500/-only.
Separate Legal Entity
An LLP is considered as a separate legal entity different from its owners or promoters. It has its distinct name and is creation of law. Being separate from its promoters / owners/ partners it can do business in its own name. However, the LLP has to act through its designated partners and in the manner which is provided in the LLP agreement.
Property Ownership
As the Limited Liability Partnership is a distinct entity, it enjoys the right to own, enjoy and transfer property. The rights can be exercised by the LLP in its own name, the stamp duty shall also be payable / paid by the LLP himself. The partners on its own can’t transfer the property or create any third party rights whatsoever on the LLP property.
Uniterrupted Existence
LLP being creation of law can be closed only by following the due process of law. The life span of LLP is thus independent of the life of its partners. The death of one partner or all partner does not bring end to the LLP, the legal heirs of the dead partners becomes the partner(s) in their place. Thus the LLP goes on until it is formally closed down by following laid down procedures.
Limited Liability As said earlier the LLP is separate legal entity hence its liabilities can’t be shared by anyone but the LLP himself. The partners are not liable for the debts or other liabilities of a LLP; the partner’s liability is limited to the unpaid amount of contribution (capital) which they have promised to bring in while incorporating the LLP of through LLP agreements in future.
Borrowing Capacity
Borrowing from banks, financial institutions and others lenders is possible by the LLP in its own name. The credit worthiness of LLP is decided by the financials of the LLP itself and financials of partners are not relevant for deciding the eligibility of LLP for borrowing. The LLP can also raise funding from private parties
Capacity to sue and be sueds
The disputes can arise in the course of business and for the resolution of the same the LLP can sue any person against which it has grievances or seek judicial intervention. The case by LLP can be filed in the name of LLP only through its authorized representative. Similarly, others can sue the LLP in its name. Thus it has capacity to sue or be sued in its own name.
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